Unemployment claims rise by 69 per cent in a month, new ONS figures show

Claims for unemployment benefits rose by 69 per cent in one month, new figures covering the first full month of the coronavirus lockdown show.

Office for National Statistics (ONS) figures show that an estimated 1.35m people were unemployed in the period from January to March 2020.

The latest ONS data shows that the claimant count climbed by 856,500 to 2.1m between March and April.

Meanwhile separate unemployment data, which covers the three months to March 2020, show the number of people unemployed rose by 50,000.

The ONS figures on joblessness claims cover those who have signed up for Jobseeker's Allowance and those deemed "searching for work" on Universal Credit.

The stats body said its figures "show that there was a 69.1 per cent increase in the number of claims between March and April, taking the level to over 2 million".

On the wider unemployment data, the majority of the ONS’s interviews took place “prior to the implementation of the coronavirus (COVID-19) social distancing measures”, meaning it is likely to give only a glimpse of the sharp rise in unemployment expected amid the shutdown of vast swathes of the economy.

But the stats body said: “Interviews in the final week of March relate to the period following the government closure of schools, introduction of lockdown and announcement of measures aimed at protecting businesses and jobs.” 

Last week the Bank of England predicted that the UK’s unemployment rate could climb to nine per cent in the first half of this year.

The ONS figures show that an estimated 1.35m people were unemployed in the period from January to March 2020, a number it notes is “50,000 more than a year earlier but 478,000 fewer than five years earlier”.

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: “While only covering the first weeks of restrictions, our figures show COVID-19 is having a major impact on the labour market.

“In March employment held up well, as furloughed workers still count as employed, but hours worked fell sharply in late March, especially in sectors such as hospitality and construction.

“Through April, though, there were signs of falling employment as real-time tax data show the number of employees on companies’ payrolls fell noticeably, and vacancies were sharply down too, with hospitality again falling steepest.”

Responding to the figures on Tuesday, Work and Pensions Secretary Therese Coffey said the UK Government’s furlough scheme, which sees the state cover 80 per cent of an employees’ wages if firms keep avoid making them redundant, had helped to reduce the impact of the lockdown.

“The Chancellor’s already extended the furlough scheme in its current form and we have also said that we’re working with employers for phase two of the furlough scheme,” she told Sky News.

“So I think we’ve undertaken a lot in the last ten days to try and give employers and employees confidence to resume work. 

“Of course we need to get confidence in the economy going as well... but it’s important that we try and get that furlough scheme, keeping that connection between the employee and the employer so that when the economy restarts fully that we can really get going very quickly.”

And she warned businesses: “If people are being laid off then there’s a lot more effort that has to go into recruitment, all the other elements of that, so that’s why the furlough scheme has been important in keeping that labour market connection.”

Labour’s Shadow Work and Pensions Secretary Jonathan Reynolds said: “These figures show the severity of the crisis we are facing. 

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“Unfortunately, these claimants will now discover the UK has one of the weakest out of work safety nets in the developed world. We support the changes the Government has made so far during the outbreak, but they do not match the scale of the crisis.

“That’s why Labour is asking the Government to make five immediate changes to our social security system to make sure no one is forced into hardship.”

The new data was published as the Resolution Foundation think tank found that young people and the over-60s were already being hard hit by the economic effects of the pandemic.

The group found that 35 per cent of 18-24 year olds were already earning less than they did before the outbreak, while those over 60 are the next most likely to be receiving less pay, with 30 per cent saying they had taken a cut.

Fewer than a quarter (23 per cent) of 35-49-year-olds said they were now earning less than before the crisis.

Meanwhile one in three 18-24-year-old employees have lost work, either by being placed on furlough (23 per cent) or losing their jobs altogether (nine per cent).

Maja Gustafsson, researcher at the Resolution Foundation, said: “Our research confirms fears that young people are being hardest hit in the current crisis.

“One in three young people have been furloughed or lost their jobs completely, and over one in three had had their pay reduced since the crisis started.

“But while young people are in the eye of the storm, they are not the only group who are experiencing big income shocks.

“Britain is experiencing a U-shaped living standards crisis, with workers in their early 60s also badly affected.

“That is why the Government’s strategy to support the recovery should combine targeted support to help young people into work, with more general stimulus to boost demand across the economy and help households of all ages.”